3.13  Responses to Conditions Created by Classical Liberalism
Classical liberalism had a big impact on economic, political, and social changes in Europe. The Industrial Revolution brought about a belief in individualism and the promotion of individual rights and freedoms. Followers of classical liberalism believed that little to no government intervention in society would benefit the common good. It would allow all people and businesses the freedom they needed to better themselves socially and financially. Adam Smith's ideas of laissez-faire capitalism allowed all people and businesses the freedom they needed to better themselves socially and financially.
Adam Smith's capitalist ideas meant that individuals and companies had freedom to compete with one another to sell goods and services. Smith argued that entrepreneurs would pay higher wages and more wealth would go back into the economic system. The more wealth the workers had, the more money they had to consume goods and services. This would allow business owners to invest in more business ventures.

However, while classical liberalism seemed to be working well for the rich, the working classes were not any better off than they had been during feudal times. It appeared that the nobility were now joined by wealthy entrepreneurs.


Sunday morning in Philadelphia, USA, about 1811-1813.
Contrast the surroundings, clothing, and general outlook of the upper class people in the picture above with the working class people in the picture on the right.
Classical liberalism seemed not to have any advantages for the working classes. Some entrepreneurs agreed with Smith's ideas; however, many capitalists ignored Smith's basic economic principles. Many capitalists paid their workers low wages and kept much of the wealth for themselves. This prevented money from circulating as Smith had intended, which created wealthy capitalist but poor workers.

The Industrial Revolution began with the textile industry. The poor farmers who had lost their lands arrived from the countryside and found work in textile factories in the cities. Men, women, and children competed for jobs in the factories. Better quality cloth with brighter colours and patterns were produced at a higher quality. Large profits were being made by entrepreneurs. The situation was a dream come true for those who promoted classical liberalism. But what about the workers?


Workers in a London slum, around 1868-1872.
Contrast the surroundings, clothing, and general outlook of the working class people in the picture above with the upper class people in the picture on the left.


Under the domestic system, one person could spin one spool of thread at a time. It often took weeks to spin several spools of thread.

In the early days of the Industrial Revolution, all work was done manually. Only a few machines were in the factories. As demand for products increased, factory owners were forced to find more productive and efficient ways to increase productivity. New machines with improved power sources (steam engines) were invented that increased productivity. They also increase unemployment because one machine was now able to complete the work that may have taken five workers to complete.


Under the factory system, one person could spin many threads at once in one day. The above machine was hand-driven. Later, much larger spinning machines were invented that were powered by steam engines.


Figure 1

As a result of industrialization, many people became unemployed and unable to care for their families. Some workers united and called themselves the Luddites. They opposed the new technology that replaced workers.

The Luddites would break into factories and smash the machines that had replaced the workers. The Luddite movement did not last long. Factory owners and government opposed this destruction with strict laws and punishments. In addition to the Luddites, other workers threatened and even attacked inventors and businessmen for making and using machines in their factories. However, the new technology was there to stay, and the return to a pre-Industrial society was not possible.

In Figure 1 (c. 1801-1806), French weavers are attacking the inventor Joseph-Marie Jacquard for putting them out of work. Jacquard invented a card-reading weaving loom that could operate more on its own, thus increasing profits but using fewer workers. As a reward for his invention, Jacquard received a pension from the French government and a royalty on each of his machines. Thousands of his machines were made.


Read "Responses to Conditions Created by Classical Liberalism" on page 125 of your textbook, Understandings of Ideologies. This page will further your understanding of the responses to classical liberalism.

You should make notes, either on paper or on your computer, about what you have read. You may want to read the tutorial How to Make Notes. When you are finished the tutorial, return here to continue this unit.

Evolution of Classical Liberalism into Modern Liberalism

The Industrial Revolution was the beginning of our modern age and introduced the technological benefits so widely enjoyed today. However, the workers in the early days of industrial development in England were exploited by the factory owners. Wages were very low, cities were crowded, violent, and dirty, and coal dust was everywhere because coal was used to power steam engines (no electrical or gasoline engines yet). Workers were often sick, and disease was rampant from lack of sanitation. There was no garbage pick up, and doctors were expensive. Workers, including women and children, were forced to work long hours with little concern for their health or safety.

In Great Britain until 1802, no laws protected workers against dangerous working conditions, long working hours, and the use of children as laborers. Britain, as well as other European countries, was a society based on the laissez-faire economics of classical liberalism. If people were willing to work under those conditions, the government should not get involved.

However, the workers were not willing to work under such conditions. They had no choice, but from time to time, the workers expressed their dissatisfaction by protesting against the factory owners. In the early years of the Industrial Revolution, little progress was made by laborers in improving working conditions. The government did not allow workers to organize into labor unions because giving the workers more rights would reduce profits for the rich factory owners. At that time, the rich landowners controlled government.

Even John Stuart Mill began to change some of his classical liberal ideas. He stated in his writings:

"To achieve their greatest potential, individuals should do as much as possible for themselves."

This was similar to what Adam Smith had taught. Mill's views began to change, however, as he observed the worsening conditions of life and work that degraded industrial workers. He saw that government needed to take a larger hand in the economy.

Mill came to advocate that government must take action to correct the abuses of capitalism. He believed capitalism could be improved but did not suggest getting rid of it.


Robert Owen a successful textile manufacturer who believed people would work better if they lived in healthy environments. At his own expense, Owen built a factory community in Scotland in 1800. He paid his workers well while providing good housing and schools. To combat high cost of living expenses, Owen established stores where goods could be bought cheaply.

Owens' factory community was a success for his workers, and it was profitable.
Several groups or movements formed during the Industrial Revolution to attempt to improve the living and working conditions of the working classes. These groups began to push society and governments to enact laws to better the lives of factory workers. In addition to workers, members of these groups often included some entrepreneurs, such as Robert Owen, who already treated their workers better and wished to promote human rights everywhere. Celebrities of the time were often members of such groups, too.

The British Factory Acts were examples of government changes introduced because of demands by workers. Employees were no longer willing to work under the same harsh conditions. Many Factory Acts were introduced to protect the workers-especially the children.


The Factory Acts also encouraged all workers to unite and demand better working conditions for themselves.

A group of workers can form and represent the will of the workers. Organized labor unions can represent better the needs of the workers. The workers are able to continue working while the labor union negotiates better working conditions and salaries.

In the 1870s, labor unions were recognized and tolerated in Great Britain. At that time, all workers obtained a ten-hour workday, the right to strike, and the right to vote. The labor force was established. The Industrial Revolution led to labor laws being introduced in the Factory Acts. This opened the door to the study and the evaluation of classical liberalism.

Charles Dickens, a famous British author, often wrote about the terrible conditions of the working classes. An illustration from Charles Dickens' 1843 novel, A Christmas Carol, "The Ghost of Christmas Present" shows the children of Want and Ignorance to Ebenezer Scrooge. Want and Ignorance represent what happens to the children of humanity when people lose their souls to capitalism and neglect the well-being of their fellow humans. Scrooge represents the greedy capitalist.